LSC to Close Virginia Book Printing Plant; Layoffs Impact 140 Workers

Thomas J. Quinlan III

LSC Communications workers and their families in Salem, Va., likely won't be feeling very festive this Memorial Day weekend.

That's because Chicago-based LSC Communications filed a Worker Adjustment and Retraining Act Notification Act (WARN) notice May 22 that it intends to permanently close its Salem, Va.-based, 278,000-sq.-ft. book manufacturing facility in July and lay off the approximately 140 workers employed there.

The notice also indicated that the layoffs are scheduled to begin July 23, and last during a two-week period.

In a letter sent to Salem, Va., Mayor Randy Foley, R. Scott Bigelow, LSC Communications chief human resources officer, wrote,  "In connection with the plant closure, no employees will have bumping rights to displace other employees working for the company ... We appreciate any support or assistance you or your office can provide to help those employees affected by the plant closing in finding new positions." Bigelow cited "changing market conditions" as the primary impetus behind the closure of the plant, which is located in ValleyTech Park inside Roanoke County.

According to The Roanoke Times, RR Donnelley began the local operation in 1997. Salem, Va., is a town with about 25,000 residents, so, obviously, the closure and subsequent layoffs is a major blow to the local community.

Jill Loope, Roanoke County's economic development director, told the newspaper that the county has engaged a regional rapid response team to help the displaced workers find new jobs, including training or educational assistance.

“It’s unfortunate that the downturn in the market for commercial printing has resulted in this action,” she said. “Our concern is for the affected employees and our goal is to assist them with identifying new employment opportunities.”

LSC Communications spun off from RR Donnelley last October, when the then-$11.7 billion conglomerate split into three separate, publicly held companies: RR Donnelley, LSC Communications and Donnelley Financial Solutions. To read my commentary published at the time on what drove the breakup of RR Donnelley into three companies, click here.

Led by Chairman and CEO Thomas Quinlan, LSC Communications reported a net loss of $1 million for Q1 2017, including $17 million in interest debt expense related to its Oct. 1, 2016, separation from RR Donnelley. First quarter 2017 net sales were $821 million, down $59 million, or 6.7%, from Q1 of 2016. However, LSC Communications reaffirmed its 2017 guidance to achieve $3.55 billion to $3.65 billion in annual sales and a non-GAAP adjusted EBITDA margin of 9.75 to 10.25%.

LSC Communications was ranked Number 3  on the most recent Printing Impressions 400 list of the largest printing companies in the U.S. and Canada as ranked by annual sales. Its annual revenues were only surpassed by RR Donnelley, at $7 billion, and Quad/Graphics, at $4.68 billion. To access the complete PI 400 ranking of the Top 400 printing companies, click here.

Employing 20,000+ workers, LSC Communications provides traditional and digital printing, print-related services and office products to book, magazine, catalog and directory publishers; merchandisers; and retailers, including newspaper inserts and coupons. Its service offering also includes e-services, warehousing and fulfillment, and supply chain management. LSC Communications maintains operations in the U.S., Canada, Mexico and Poland, including more than 50 production facilities.

Printing Impressions reached out to LSC Communications' Director of Marketing Communications for comment on the Salem, Va., book plant closure, but did not receive any response by the time this post was published.